5 Things to Do to Increase the Approval Chances of Your Credit Card Application
In the Philippines, credit cards have a bit of a bad reputation because of a handful of “horror stories” about people who fell into debt. However, these situations are actually the exception and not the norm. When used responsibly, a credit card can be a powerful tool that can help you achieve your financial goals.
That said, even armed with the correct information about credit cards, Philippines’ consumers still tend to be overly cautious about them. One of the possible reasons is that credit card providers can be strict about the requirements, which results in new applicants getting rejected.
Fortunately, there are some things you can do to increase your chances of getting approved. Here are just a few:
Apply For Cards That Match Your Capacity to Pay and Lifestyle
One of the biggest things that determine whether or not your credit card application will be approved is your gross monthly/annual income—it should meet the bank’s requirements. In short, apply for cards that match your capacity to pay. If you’re earning Php 30,000 a month, then look for a card that’s in the same range. Work on getting a higher credit limit in the future, once you’ve established that you’re a good customer.
In addition, it’s a good idea to pick a card that matches your lifestyle. For example, if you drive your car almost every day, you’ll benefit most from a credit card that has a partnership with gas stations. If you’re a parent, you might want to pick a credit card that gives you more rewards points when you use it to buy groceries. This way, when the bank reviews your application, they can better appreciate why you picked that certain card. Of course, choosing a credit card that matches your lifestyle means you can maximize its offers.
Pay Your Debts
If you have an outstanding loan from any financial institution, it’s best to pay them in full before you apply for a credit card. Do note that having an existing loan doesn’t mean automatic disapproval—after all, some loans can be considered “good” such as a housing loan. However, if you have too much going on at the same time, it will appear that you won’t be able to cover all your payables with your income.
To increase your chances of approval for a credit card, make sure that you don’t have unsettled debts. If you do, make sure that those you’re currently paying for don’t exceed 35% of your income. Make sure to factor in the future bills you’re going to pay if you get approved for a credit card.
Know and Submit All Requirements
Different credit card providers may have different requirements when it comes to granting credit cards. However, some of the most common ones include the following:
- proof of income, like payslip or certificate of employment
- valid government-issued IDs, like your passport or driver’s license
- proof of billing address
- ITR (BIR Form 2316) with a bank stamp
To increase your chances of approval, make sure to check all of the must-haves in the requirements list and have them ready upon submission. For supplemental documents and requirements, it’s possible that you may not need them; nevertheless, it’s still best to have copies with you so you can furnish them ASAP if the bank asks.
Open an Account with the Issuing Bank
When a bank approves your application and gives you a credit card, it means that they trust you to use the card responsibly and pay your bills on time. This simply means that you should do what you can to prove that you’re worthy of that trust. One way to do this is to open an account with the issuing bank of the credit card.
It can be any type of account: savings, checking, or even time deposit. Then, make sure that you meet or exceed the average daily balance; in addition, for saving accounts, it’s best to have regular activity even if it’s just depositing an additional Php 1,000 per month. Doing this will not guarantee the approval of your credit card application, but it can certainly give you better chances. What’s more, depending on the amount you placed in the account, you can receive a higher credit limit than what you initially applied for.
Don’t Be Afraid to Follow Up
Last but not least, if you haven’t received any communication from the bank regarding your application, don’t hesitate to follow up with them. Remember: banks receive hundreds if not thousands of these applications every day so delays are understandable.
As much as possible, don’t use email or social media. Find out what their hotline is and give them a call. Remember to be courteous when you speak to the representatives and express clearly why you applied for that specific credit card.
In the end, there’s no way to 100% guarantee that your credit card application will be approved. These tips, however, can give your application a bit of a boost that can go a long way.